Q4 & Full Year 2023 Production Results and Operating
Highlights
Serabi Gold plc (“Serabi” or the
“Company”) (AIM: SRB, TSX: SBI), is pleased to announce
the Company’s Q4-2023 and Full Year (“FY”) 2023 production results,
operating highlights, FY 2024 production guidance, exploration
progress and appointment of a Toronto-based Vice President,
Investor Relations & Business Development (all financial
amounts are expressed in U.S. dollars unless otherwise
indicated).
QUARTER HIGHLIGHTS
- Q4-2023 gold
production of 7,891 ounces; FY2023 gold production of 33,153
ounces, a 4.2% improvement to FY2022.
- Coringa
contributed 2,694 ounces of gold production in Q4 at mined grades
of 6.33 g/t gold.
- Cash held on 31
December was $11.6 million, a 60% increase over end of year
2022.
- Early
exploration success at Matilda under the Exploration Alliance with
Vale yielded an exploration target with an initial conceptual
resource potential between 21Mt @ 0.40% Cu up to 81Mt @ 0.28% Cu
(this potential volume and grade is conceptual in nature as
insufficient exploration has been completed to define a mineral
resource and it is uncertain if a mineral resource estimate will be
delineated).
- Released an
updated mineral reserve estimate for the Palito Complex in November
2023 which estimates 206,400 ounces (824,800 tonnes @ 7.78 g/t Au)
of Proven and Probable Reserves, a threefold increase on the
previous mineral reserve estimate of 67,344 ounces.
- Purchased ore
sorter for Coringa from Comex, which is now being transported to
site and expected to be operational by Q4-2024.
- Appointed Andrew
Khov, CPA, CA, CFA as its new Vice President, Investor Relations
& Business Development, based in Toronto, Ontario, Canada.
Mike Hodgson, CEO of Serabi,
commented:
“A satisfactory fourth quarter means gold
production for the year has been 33,153 ounces which is a 4.2%
improvement to 2022. The process plant continued to perform
admirably with a quarterly record of 48,988 milled tonnes, despite
unplanned downtime. During the quarter,
following successful negotiations with the workforce and union,
underground hours per shift were increased, the benefits of which
are reflected in our quarterly development rates which exceeded
3,000 metres for the first time in 2023.
“There has continued to be significant mine
development at Coringa which contributed production of a record
2,694 ounces. The mine is now being worked on four levels, with the
newest level, 225mRL just intersected at the start of 2024. The
Coringa orebody continues to exceed expectations with payability of
the development significantly better than forecast, and we are
planning an underground drill campaign at site during the first
half of 2024. Combined with the positive mineral reconciliation we
would expect this to expand the mineral resource for Serra and plan
to issue a new mineral resource and reserve estimate during the
Q3/2024. This follows from the new Palito
reserve and resource estimate issued in November 2023, which
estimates Proven and Probable Reserves totalling 206,400 ounces
(824,800 tonnes @ 7.78 g/t Au), a threefold increase on the
previously disclosed total of 67,344 ounces as at 31 December
2021.
“Our greenfield exploration efforts at
Matilda, being undertaken in partnership with Vale, resulted in an
in-house estimation of 81Mt @ 0.28%
Cu including 21MT @ 0.4%
Cu though it should be cautioned that this
potential volume and grade is conceptual in nature as insufficient
exploration has been completed to define a mineral resource and it
is uncertain if a mineral resource estimate will be
delineated. This exploration potential has
been generated from 21 drillholes, which totalled 7,598
metres. The 0.40% Cu grades are significant
and certainly comparable to commercial porphyry deposit grades. We
are focussed on scale and the next step will be to further drill
and increase the potential size of this prospective deposit. We
completed deep geophysics to better target the next round of
drilling.”
“We look forward to 2024 with great
optimism. An excellent geological resource update at Palito,
Coringa mine development improving quarter by quarter, and with
permitting of Coringa expected to reach a positive conclusion, we
expect meaningful production growth and continued strong
operational cash flow in the next 24 months. Alongside the
opportunities afforded by our exciting exploration activities,
there should be continued positive news for shareholders over the
coming months.”
OPERATIONAL RESULTS
Total production for the fourth quarter of 2023
was 7,891 ounces of gold, with Coringa contributing 2,694 ounces to
this total.
Total ore mined from the Palito Complex during
the quarter was 35,497 tonnes at 4.78 g/t compared to 35,219 tonnes
at 6.81 g/t of gold for the third quarter of 2023. Palito grades
for the year averaged 6.12 g/t gold. Most of the ore is being
generated from the Ipe and Mogno veins, but development of the G3
North area is well underway, and this sector will be a significant
ore source over the next two years.
Development mining operations at Coringa
totalled 14,044 tonnes at 6.33 g/t in the quarter, by far the
highest total since the operation commenced. The Coringa ore is
being derived from the development of the Serra orebody, part of
the Coringa complex, from four levels, and now including the new
225m level.
48,988 tonnes of ROM ore were processed through
the Palito plant during the quarter, with an average grade of 5.31
g/t of gold, compared with 43,092 tonnes at 6.72 g/t of gold in the
third quarter of 2023. This included 13,363 tonnes of Coringa ore
at a feed grade of 6.45 g/t gold.
A total of 3,134 metres of horizontal
development has been completed across both sites. 2,327 metres of
horizontal development was recorded at Palito, of which 1,250
metres was ore development. The balance is the ramp, crosscuts and
stope preparation development. Horizontal development at Coringa
totalled 807 metres, of which 428 metres was in ore.
SUMMARY PRODUCTION STATISTICS FOR 2023 AND
2022 |
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Full Year |
Q1 |
Q2 |
Q3 |
Q4 |
Full Year |
2023 |
2023 |
2023 |
2023 |
2023 |
2022 |
2022 |
2022 |
2022 |
2022 |
Group |
|
|
|
|
|
|
|
|
|
|
|
Gold
production (1)(2) |
Ounces |
8,005 |
8,518 |
8,738 |
7,891 |
33,153 |
7,062 |
8,418 |
8,542 |
7,798 |
31,819 |
Mined
ore |
Tonnes |
41,546 |
41,022 |
44,744 |
49,541 |
176,853 |
40,606 |
44,008 |
46,863 |
42,264 |
173,741 |
|
Gold grade (g/t) |
6.49 |
6.94 |
6.64 |
5.22 |
6.28 |
5.95 |
6.26 |
6.22 |
6.01 |
6.14 |
Milled
ore |
Tonnes |
39,004 |
41,116 |
43,092 |
48,988 |
172,200 |
41,357 |
43,488 |
44,867 |
42,692 |
172,404 |
|
Gold
grade (g/t) |
6.75 |
6.84 |
6.72 |
5.31 |
6.35 |
5.72 |
6.43 |
6.34 |
6.05 |
6.14 |
Palito Complex |
|
|
|
|
|
|
|
|
|
|
|
Gold
production (1)(2) |
Ounces |
5,776 |
6,332 |
7,025 |
5,197 |
24,330 |
7,062 |
8,418 |
7,972 |
7,355 |
30,807 |
Mined
ore |
Tonnes |
31,705 |
31,652 |
35,219 |
35,497 |
134,073 |
40,606 |
44,008 |
43,180 |
38,293 |
163,506 |
|
Gold grade (g/t) |
6.14 |
6.68 |
6.81 |
4.78 |
6.08 |
5.84 |
6.26 |
6.28 |
6.20 |
6.15 |
Milled
ore |
Tonnes |
31,273 |
31,901 |
34,515 |
35,625 |
133,314 |
41,357 |
43,488 |
42,257 |
39,573 |
165,502 |
|
Gold grade (g/t) |
6.14 |
6.63 |
6.81 |
4.88 |
6.09 |
5.72 |
6.43 |
6.30 |
6.17 |
6.14 |
Horizontal development |
Metres |
2,011 |
2,469 |
2,325 |
2,327 |
9,132 |
2,938 |
3,353 |
2,458 |
2,245 |
10,994 |
Coringa |
|
|
|
|
|
|
|
|
|
|
|
Gold
production (1)(2) |
Ounces |
2,229 |
2,186 |
1,713 |
2,694 |
8,822 |
|
|
570 |
443 |
1,013 |
Mined
ore |
Tonnes |
9,841 |
9,370 |
9,525 |
14,044 |
42,780 |
|
|
3,683 |
3,971 |
7,654 |
|
Gold grade (g/t) |
7.63 |
7.83 |
5.99 |
6.33 |
6.88 |
|
|
5.46 |
4.15 |
4.78 |
Milled
ore |
Tonnes |
7,731 |
9,215 |
8,577 |
13,363 |
38,886 |
|
|
2,610 |
3,119 |
5,729 |
|
Gold grade (g/t) |
9.22 |
7.59 |
6.37 |
6.45 |
7.25 |
|
|
7.00 |
4.58 |
5.68 |
Horizontal development |
Metres |
453 |
508 |
598 |
807 |
2,356 |
212 |
302 |
632 |
645 |
1,791 |
(1) The
table may not sum due to rounding.
(2) Production
numbers are subject to change pending final assay analysis from
refineries.
CORINGA LICENCING
In July 2023, the Company signed an agreement
with representatives of the indigenous communities around Coringa.
This agreement confirmed the willingness of key stakeholders to see
the project progress and was presented to the Court and the other
parties involved (Environmental Secretary, Federal Attorneys and
National Mining Agency) who agreed to the terms. The indigenous
impact report (“ECI”) will be concluded simultaneously with a Plano
Basico Ambiental (PBA) which will define the community programmes
that the Company will undertake over the life of the project. The
ECI has now been circulated to all stakeholders for final sign
off.
The July 2023 agreement has been followed up
with meetings with all other interested parties. The Court has now
ratified a further agreement signed by all stakeholders ((including
INCRA (Brazilian Agrarian Reform Institute) and FUNAI (National
Indigenous Foundation)) approving the mining and environmental
agencies (ANM and SEMAS) to conclude their analysis and issue
renewals of the Coringa trial mining licence and accompanying
environmental operating license.
EXPLORATION UPDATE
As previously announced in November 2023, the
greenfield exploration activities at Matilda, which are being
undertaken in partnership with Vale have delineated a shallow
mineralised zone with an exploration target with a potential range
of between 21Mt @ 0.40% Cu up to 81Mt @ 0.28% Cu. In addition to
this zone, the system is open to the NW, SE and at depth. This
potential volume and grade is however, conceptual in nature as
insufficient exploration has been completed to define a mineral
resource and it is uncertain if a mineral resource estimate will be
delineated. This estimation is derived from the 21 drillholes,
which totalled 7,598metres. Of the 21 holes drilled, 12 have
intersected porphyry copper grades in excess of 0.20% copper.
During Q4-2023, drill results received with
significant intercepts included:
- Hole 23-MT-010 –
21.45m @ 0.40% Cu and 0.11 g/t gold (“Au”) from 95.55m
- Hole 23-MT-015 –
25.00m @ 0.34% Cu and 0.09 g/t Au from 107.00m
- Hole 23-MT-016 –
34.00m @ 0.34% Cu and 0.10 g/t Au from 142.00m
In addition to the Matilda works, the following
exploration was undertaken during the quarter:
- Interpretation
of regional airborne geophysics and soil geochemistry which have
large scale (crustal) dilatational feature which hosts at least
four new gold and copper prospects.
- 5,500 soil
samples collected and part assayed covering over 70% of the Palito
Complex tenement.
- At Calico North,
preliminary results have defined anomalous and consistent gold
trends which follow a NW-SE structural trend, similar to the Palito
deposit, which is just 1.5km to the north. The results suggest the
continuity of the Palito mineralized corridor to the
southwest.
- At Isla, a 3.5km
geochemical, NW-SE trending >300ppm copper anomaly has been
defined, very similar in size and copper values with the ones at
the Matilda copper prospect. The copper anomaly also has a
coincidental airborne EM conductivity anomaly.
-
Re-interpretation of existing targets have refined our
understanding and identified potential for epithermal and porphyry
style mineralisation at Ganso, Forquilha and Calico targets.
FINANCE UPDATE
Cash balances at the end of December 2023 were
$11.6 million which includes $0.6 million of funds held for the
Vale Exploration Alliance. This compares with a cash balance of
$15.3 million as at 30 September 2023 and $7.2 million at the end
of December 2022. Cash directly attributable to the Group was
$10.9 million at 31 December, an increase of $3.7 million during
the year. The Company has a net cash balance of $5.0m.
Lower gold production and as a result lower
sales volumes, together with increased inventory at the end of the
period, resulted in cash received from sales for the period being
$3.9 million less that for the third quarter. During the quarter,
the Company made exceptional payments compared with prior periods
for the thirteenth salary payment that is paid in November and
December, provisional profits tax payments for the 2023 tax year,
and initial down payments for the ore sorter purchase. Operating
costs were also higher as a result of increased usage of diesel for
power generation during the start of the wet season.
FY 2024 PRODUCTION GUIDANCE
The Company expects FY 2024 consolidated gold
production of 38,000 - 40,000 ounces.
APPOINTMENT OF VP INVESTOR RELATIONS AND
BUSINESS DEVELOPMENT
The Company is pleased to announce the
appointment of Andrew Khov, CPA, CA, CFA, as its new Vice
President, Investor Relations and Business Development, based in
Toronto, Ontario, Canada. Prior to joining Serabi, Andrew served as
Vice President, Investment Banking in Mining & Metals at RBC
Capital Markets and Raymond James in Toronto where he advised
clients ranging from senior producers to early-stage exploration
companies on a wide variety of strategic initiatives including
corporate finance, M&A, joint ventures, strategic investments,
streaming & royalty transactions and other initiatives. Andrew
previously held equity research positions at Cormark Securities and
Canaccord Genuity. Mr. Khov began his professional career at KPMG
LLP. He is a Chartered Professional Accountant and holds the
Chartered Financial Analyst designation.
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018.
The person who arranged for the release of
this announcement on behalf of the Company was Clive Line,
Director.
Enquiries
SERABI GOLD plc
Michael
Hodgson t
+44 (0)20 7246 6830
Chief
Executive m
+44 (0)7799 473621
Clive
Line t
+44 (0)20 7246 6830
Finance
director m
+44 (0)7710 151692
e
contact@serabigold.com
BEAUMONT CORNISH Limited
Nominated Adviser & Financial Adviser
Roland Cornish / Michael
Cornish t
+44 (0)20 7628 3396
PEEL HUNT LLP
Joint UK Broker
Ross
Allister t
+44 (0)20 7418 9000
TAMESIS PARTNERS LLP
Joint UK Broker
Charlie Bendon/ Richard
Greenfield t
+44 (0)20 3882 2868
CAMARCO
Financial PR
Gordon Poole / Emily
Hall t
+44 (0)20 3757 4980
Copies of this announcement are available from
the Company's website at www.serabigold.com.
See
www.serabigold.com for more information
and follow us on twitter @Serabi_Gold
GLOSSARY OF TERMS
The following is a glossary of technical
terms:
“Ag” |
means silver. |
“Au” |
means gold. |
“assay” |
in economic geology, means to analyse the proportions of metal in a
rock or overburden sample; to test an ore or mineral for
composition, purity, weight or other properties of commercial
interest. |
“CIM” |
means the Canadian Institute of Mining, Metallurgy and
Petroleum. |
“chalcopyrite” |
is a sulphide of copper and iron. |
“Cu” |
means copper. |
“cut-off grade” |
the lowest grade of mineralised material that qualifies as ore in
each deposit; rock of the lowest assay included in an ore
estimate. |
“dacite porphyry intrusive” |
a silica-rich igneous rock with larger phenocrysts (crystals)
within a fine-grained matrix |
“deposit” |
is a mineralised body which has been physically delineated by
sufficient drilling, trenching, and/or underground work, and found
to contain a sufficient average grade of metal or metals to warrant
further exploration and/or development expenditures; such a deposit
does not qualify as a commercially mineable ore body or as
containing ore reserves, until final legal, technical, and economic
factors have been resolved. |
“electromagnetics” |
is a geophysical technique tool measuring the magnetic field
generated by subjecting the sub-surface to electrical
currents. |
“garimpo” |
is a local artisanal mining operation |
“garimpeiro” |
is a local artisanal miner. |
“geochemical” |
refers to geological information using measurements derived from
chemical analysis. |
“geophysical” |
refers to geological information using measurements derived from
the use of magnetic and electrical readings. |
“geophysical techniques” |
include the exploration of an area by exploiting differences in
physical properties of different rock types. Geophysical methods
include seismic, magnetic, gravity, induced polarisation and other
techniques; geophysical surveys can be undertaken from the ground
or from the air. |
“gossan” |
is an iron-bearing weathered product that overlies a sulphide
deposit. |
“grade” |
is the concentration of mineral within the host rock typically
quoted as grams per tonne (g/t), parts per million (ppm) or parts
per billion (ppb). |
“g/t” |
means grams per tonne. |
“granodiorite” |
is an igneous intrusive rock like granite. |
“hectare” or a “ha” |
is a unit of measurement equal to 10,000 square metres. |
“igneous” |
is a rock that has solidified from molten material or magma. |
“IP” |
refers to induced polarisation, a geophysical technique whereby an
electric current is induced into the sub-surface and the
conductivity of the sub-surface is recorded. |
“intrusive” |
is a body of rock that invades older rocks. |
"Indicated Mineral Resource |
An Indicated Mineral Resource is that part of a Mineral Resource
for which quantity, grade or quality, densities, shape and physical
characteristics are estimated with sufficient confidence to allow
the application of Modifying Factors in sufficient detail to
support mine planning and evaluation of the economic viability of
the deposit. Geological evidence is derived from adequately
detailed and reliable exploration, sampling and testing and is
sufficient to assume geological and grade or quality continuity
between points of observation. An Indicated Mineral Resource has a
lower level of confidence than that applying to a Measured Mineral
Resource and may only be converted to a Probable Mineral
Reserve.
|
"Inferred Mineral Resource” |
An Inferred Mineral Resource is that part of a Mineral Resource for
which quantity and grade or quality are estimated based on limited
geological evidence and sampling. Geological evidence is sufficient
to imply but not verify geological and grade or quality continuity.
An Inferred Mineral Resource has a lower level of confidence than
that applying to an Indicated Mineral Resource and must not be
converted to a Mineral Reserve. It is reasonably expected that most
of the Inferred Mineral Resources could be upgraded to Indicated
Mineral Resources with continued exploration.
|
“Measured Mineral Resource”
|
A Measured Mineral Resource is that part of a Mineral Resource for
which quantity, grade or quality, densities, shape, and physical
characteristics are estimated with confidence sufficient to allow
the application of Modifying Factors to support detailed mine
planning and final evaluation of the economic viability of the
deposit. Geological evidence is derived from detailed and reliable
exploration, sampling and testing and is sufficient to confirm
geological and grade or quality continuity between points of
observation. A Measured Mineral Resource has a higher level of
confidence than that applying to either an Indicated Mineral
Resource or an Inferred Mineral Resource. It may be converted to a
Proven Mineral Reserve or to a Probable Mineral Reserve.
|
“mineralisation” |
the concentration of metals and their chemical compounds within a
body of rock. |
“mineralised” |
refers to rock which contains minerals e.g., iron, copper,
gold. |
"Mineral Resource” |
A Mineral Resource is a concentration or occurrence of solid
material of economic interest in or on the Earth’s crust in such
form, grade or quality and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade or quality, continuity and other geological characteristics
of a Mineral Resource are known, estimated or interpreted from
specific geological evidence and knowledge, including sampling.
|
“Mineral Reserve” |
A Mineral Reserve is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials
and allowances for losses, which may occur when the material is
mined or extracted and is defined by studies at Pre-Feasibility or
Feasibility level as appropriate that include application of
Modifying Factors. Such studies demonstrate that, at the time of
reporting, extraction could reasonably be justified.
|
“Mo-Bi-As-Te-W-Sn” |
Molybdenum-Bismuth-Arsenic-Tellurium-Tungsten-Tin |
“monzogranite” |
a biotite rich granite, often part of the later-stage emplacement
of a larger granite body. |
“mt” |
means million tonnes. |
“ore” |
means a metal or mineral or a combination of these of sufficient
value as to quality and quantity to enable it to be mined at a
profit. |
“oxides” |
are near surface bedrock which has been weathered and oxidised by
long term exposure to the effects of water and air. |
“ppm” |
means parts per million. |
“saprolite” |
is a weathered or decomposed clay-rich rock. |
“sulphide” |
refers to minerals consisting of a chemical combination of sulphur
with a metal. |
“vein” |
is a generic term to describe an occurrence of mineralised rock
within an area of non-mineralised rock. |
“VTEM” |
refers to versa time domain electromagnetic, a particular variant
of time-domain electromagnetic geophysical survey to prospect for
conductive bodies below surface. |
“XRF” |
X-ray Fluorescence (XRF) is a spectrometric technique used to
perform elemental analysis non-destructively on samples |
Assay Results
Assay results reported within this release include those provided
by the Company's own on-site laboratory facilities at Palito and
have not yet been independently verified. Serabi closely monitors
the performance of its own facility against results from
independent laboratory analysis for quality control purpose. As a
matter of normal practice, the Company sends duplicate samples
derived from a variety of the Company's activities to accredited
laboratory facilities for independent verification. Since mid-2019,
over 10,000 exploration drill core samples have been assayed at
both the Palito laboratory and certified external laboratory, in
most cases the ALS laboratory in Belo Horizonte, Brazil. When
comparing significant assays with grades exceeding 1 g/t gold,
comparison between Palito versus external results record an average
over-estimation by the Palito laboratory of 6.7% over this period.
Based on the results of this work, the Company's management are
satisfied that the Company's own facility shows sufficiently good
correlation with independent laboratory facilities for exploration
drill samples. The Company would expect that in the preparation of
any future independent Reserve/Resource statement undertaken in
compliance with a recognized standard, the independent authors of
such a statement would not use Palito assay results without
sufficient duplicates from an appropriately certificated
laboratory.
Forward-looking statements
Certain statements in this announcement are, or may be deemed to
be, forward looking statements. Forward looking statements are
identified by their use of terms and phrases such as ‘‘believe’’,
‘‘could’’, “should” ‘‘envisage’’, ‘‘estimate’’, ‘‘intend’’,
‘‘may’’, ‘‘plan’’, ‘‘will’’ or the negative of those, variations or
comparable expressions, including references to assumptions. These
forward-looking statements are not based on historical facts but
rather on the Directors’ current expectations and assumptions
regarding the Company’s future growth, results of operations,
performance, future capital and other expenditures (including the
amount, nature and sources of funding thereof), competitive
advantages, business prospects and opportunities. Such forward
looking statements reflect the Directors’ current beliefs and
assumptions and are based on information currently available to the
Directors. Several factors could cause actual results to differ
materially from the results discussed in the forward-looking
statements including risks associated with vulnerability to general
economic and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although any forward-looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with such
forward looking statements.
Qualified Persons Statement
The scientific and technical information contained within this
announcement has been reviewed and approved by Michael Hodgson, a
Director of the Company. Mr Hodgson is an Economic Geologist by
training with over 30 years' experience in the mining industry. He
holds a BSc (Hons) Geology, University of London, a MSc Mining
Geology, University of Leicester and is a Fellow of the Institute
of Materials, Minerals and Mining and a Chartered Engineer of the
Engineering Council of UK, recognizing him as both a Qualified
Person for the purposes of Canadian National Instrument 43-101 and
by the AIM Guidance Note on Mining and Oil & Gas Companies
dated June 2009.
Neither the Toronto Stock Exchange, nor any other securities
regulatory authority, has approved or disapproved of the contents
of this news release
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